How Budget Reconciliation is Making Everything Worse in Washington

Congress is moving two ambitious domestic policy bills on two procedural tracks.

And that small difference is a big deal.

The $1.2 trillion bipartisan infrastructure bill, aimed at repairing and replacing physical infrastructure such as roads, bridges, and waterways, is being advanced through (more or less) traditional legislative means. Alternatively, a $3.5 trillion social spending and climate bill is being advanced through a process known as budget reconciliation. And while most Americans are more concerned with outcomes than processes, the increasingly common trend of both parties trying to pass large portions of their domestic agendas via reconciliation is yielding a host of unintended consequences, most notably a situation in which legislation is constantly at risk of being undone or undermined when the minority party reassumes power.

As Bill Hoagland, a former senior staffer on the Senate Budget Committee, said:

“Both Democrats and Republicans have mistreated and abused this reconciliation process that was never intended to be used for major, fundamental changes to public policy…and using such a mechanism guarantees that highly partisan legislation emanating from this procedure will be unsustainable over time.”

Reconciliation, a relatively arcane procedural tool, the ordinary definition of which denotes compromise, has become a source of division in our democracy. The New Center decided to dig deeper into the history of reconciliation to understand why it has become so abused and what this means for Congress today.

The Roots of Reconciliation: The 1974 Congressional Budget Act

The budget reconciliation procedure was introduced through the 1974 Congressional Budget Act, and was initially intended for a very specific legislative purpose. In short, budget reconciliation is essentially a process which begins with Congress passing a budget plan (or resolution), instructing committees to write legislation that conforms to the budget plan, and consolidating each committee’s legislation into a reconciliation bill. That is, reconciliation bills were intended to “reconcile” Congress’s budget plan with its actual spending and revenue. The process outlined in the 1974 bill has since been amended several times, but has retained its central purpose.

Because of the procedure’s narrowly defined purpose, the rules of budget reconciliation limit the content of the legislation and the amount of time that Congress has to act.

Thanks to a 1985 amendment known as the Byrd Rule, reconciliation bills are not allowed to include any matter that does not directly impact the federal government’s revenue, spending, or debt limit. The effects of each provision on the spending, revenue, or the debt cannot be “merely incidental.” This is why the Senate parliamentarian—who rules on which policy provisions adhere to the Byrd Rule—removed the $15 national minimum wage from the $1.9 trillion American Rescue plan passed in March 2021. Needless to say, removing all provisions that do not directly impact the budget greatly hamstrings Congress’s ability to pass complete and comprehensive legislation. Put succinctly by the New York Times’ Ezra Klein, “when Congress writes laws through budget reconciliation, it writes them with one arm tied behind its back.”

Moreover, legislating through the budget reconciliation process ensures that policymakers are always in a race against time. According to the Congressional Research Service, reconciliation was initially intended to be a brief process “to make any last-minute changes in pending legislation or current law necessary to bring the budget resolution policies to fruition.” Although legislators adopted several amendments throughout the 1980s to help ease the time constraint, reconciling Congress’s budget plan was intended to take a maximum of two months. While this guideline has been consistently ignored by both Republican and Democratic majorities, legislators clearly still feel pressure to act quickly—evidenced by Democratic congressional leaders aiming to pass the $3.5 trillion reconciliation bill on an accelerated timetable this fall.  

Advocates for moving bills through reconciliation argue that it is the only way to avoid gridlock in an oft divided Washington. But highly consequential legislation warrants deliberation and careful consideration—better accomplished through the traditional legislative process. In the past, major legislation has taken months, if not years to develop, debate, and pass. The landmark bipartisan 1986 tax reform bill, for instance, was debated for a total of 323 days before it was signed into law. In contrast, the debate over the current $3.5 trillion reconciliation package is “almost certain to sidestep many of the hallmarks of the legislative process,” according to lawmakers and aides cited in the Washington Post.

Of course, Washington in 2021 looks very different than Washington in 1986 as there seem to be fewer and fewer issues upon which Democrats and Republicans can agree. One can understand why party leaders, when given the choice between doing nothing to address an issue or do something via a limited reconciliation process, choose to try something. But of late, reconciliation isn’t being used as a tool of last resort after bipartisan negotiations break down. Leaders increasingly plow ahead with a purely partisan path before bipartisan negotiations even begin.

Beyond the inherent limitations of enacting policy through budget reconciliation, doing so also often precludes cooperation and reinforces partisanship. Because reconciliation bills are not subject to the filibuster, only a simple majority is needed to pass major legislation. While reconciliation bills don’t necessarily have to be partisan—the 2001 Bush tax cuts were advanced via reconciliation and passed with healthy bipartisan majorities—congressional leaders increasingly see them as a tool to shut out the other party. Indeed, the last three reconciliation bills—the Tax Cuts and Jobs Act of 2017, the American Rescue Plan, and now the $3.5 trillion budget plan—are the three most significant pieces of federal legislation over the past two administrations, and all been enacted or likely will be enacted, without a single minority vote. The exclusion, now commonplace in reconciliation efforts, reinforces partisanship, strengthens polarization, and precludes future cooperation.

In sum, reconciliation was never intended to be the primary vehicle for U.S. policymaking but that is precisely what it has become.

There are many common-sense congressional reforms that would enhance meaningful participation from the minority party, such as ensuring that minority lawmakers have the opportunity to offer amendments on legislative proposals. To illustrate the troubling trend of minority exclusion, the frequency of “open rules” in Congress (rules on debate which permit consideration of amendments for up to five minutes) fell from 81 percent in the mid-1970s to only 12 percent from 2007-2009. During the 115th Congress (2017-2019), the House had zero open rules. To guarantee greater minority participation, Congress should ensure that open debate is the norm, not the exception. To do this, the House Committee on Rules could require a supermajority to change open rules to closed rules. By changing the rules to ensure greater participation from the minority—as opposed to excluding them from the process entirely—Congress will produce better legislation and mitigate the corrosive effects of partisanship and polarization.

In the 47 years since the budget reconciliation process was introduced, it has gradually but inexorably led to more rushed, less vetted, and more partisan legislation that can’t comprehensively address big national problems.

It’s often said in Washington that “process is policy.” Well, the budget reconciliation process is broken, and we’re going to keep getting flawed and partisan policy until Congress summons the will to fix it or to use it in the limited fashion for which it is intended.